Addressing threats to health care's core values, especially those stemming from concentration and abuse of power. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.

Thursday, August 21, 2014

Move Along, No Health Care Corruption to See Here

Health care corruption, remains a largely taboo topic, especially when it occurs in developed countries like the US. Searching PubMed or major medical and health care journals at best will reveal a few articles on health care corruption, nearly all about corruption somewhere else than the authors' countries, usually in someplace much poorer. While the media may publish stories about issues related to health care corruption, they are almost never so labelled.

In the last few weeks, there have been two major US news stories that seem to clearly involve allegations of health care corruption, but not in so many words. Both were big because the indicted were sitting governors of big US states.

A grand jury indicted Texas Gov. Rick Perry (R) on two felony counts Friday, alleging that he abused his office and used a veto threat to coerce an elected district attorney to resign.

The grand jury began considering charges against Perry earlier this year following an ethics complaint
alleging that he abused his veto power when he cut funding for the
state’s anti-corruption unit, which is part of the Travis County
district attorney’s office.

Perry
threatened to veto $7.5 million in state funding for her office unless
Lehmberg resigned. She refused, and Perry followed through on his veto
threat, saying that he could not provide the money 'when the person
charged with ultimate responsibility of that unit has lost the public’s
confidence.'

There has been a big kerfuffle over this indictment, with the majority seeming to think it is some sort of political stunt that will have little effect on Mr Perry. For example, the Washington Post later ran an editorial calling the indictment "wrong-headed."

However, articles in some less prominent outlets suggested that the indictment actually raised questions about possible corruption, actually health care corruption. For example, James Moore writing in the Huffington Post,

Some of the media appear to have adopted the Perry narrative that he
wanted to get rid of an irresponsible Travis County District Attorney
Rosemary Lehmberg because she had been arrested for driving under the
influence of alcohol.

However,

The PIU had been investigating the Cancer Research and Prevention
Institute (CPRIT), a $3 billion dollar taxpayer funded project that
awarded research and investment grants to startups targeting cancer
cures. The entire scientific review team, including Nobel Laureate
scientists, resigned because they said millions were handed out through
political favoritism. Investigations by Texas newspapers indicated much
of the money was ending up in projects proposed by campaign donors and
supporters of Governor Perry. In fact, one of the executives of CPRIT
was indicted in the PIU investigation for awarding an $11 million dollar
grant to a company without the proposal undergoing any type of review.

As documented by the Cancer Letter, the scientific reviewers at CRPIT quit because of perceptions that the scientific review process was being manipulated, possibly for private gain,

The scientists submitted blistering letters explaining their decisions to leave.

'This past spring, the peer review system of CPRIT was dishonored by actions of CPRIT’s administration when a set of grants were delayed in funding because of suspicion of favoritism,' writes Phillip Sharp, chair of the council. 'Further, a proposal based on science similar to that previously reviewed by the CPRIT council was selected for funding using other criteria. These events ultimately led to the resignation of Dr. Gilman. The same events motivate my decision to resign now.'

Both Gilman and Sharp are Nobel laureates.

The walkout—and, perhaps more so, the letters—send a powerful signal that CPRIT is now outside mainstream cancer science. The controversy—and the instance of 'favoritism' alleged by Sharp—began when the state agency funded an $18 million project spearheaded by Lynda Chin, an MD Anderson scientist and the wife of that institution’s president.

In addition, the New Republic published an article suggesting the involvement of Mr Perry and his administration in other cases of alleged health care corruption. These included trying to use state government to mandate a vaccine made by a company for who his former chief of staff was a lobbyist,

His attempt to mandate that Texas girls receive a vaccine for HPV,
seemingly at odds with Perry’s social conservatism, looked more
explicable when one considered that his former chief of staff was
lobbying for Merck, the vaccine’s manufacturer. And yes, Merck
contributed $30,000 to Perry over his first decade as governor.

Also, he put appointed to the state board of health top employees of a medical supply company owned by a big campaign contributor, and in which Mr Perry himself also invested,

Perry expressed his gratitude to James Leininger, a staunch conservative
whose last-minute loan to Perry helped him narrowly win his 1998 race
for lieutenant governor and who gave him $239,000 more over the next
decade, by appointing former top employees of Leininger’s hospital-bed
company—in which Perry’s personal investment during the ’90s resulted in a $38,000 gain—to the Texas Board of Health,...

Finally, the state Emerging Technology Fund gave considerable money to another friend of and big campaign donor to Mr Perry,

A year earlier, the A&M system had entered into an agreement to
develop vaccines with a therapeutics manufacturing firm called Introgen;
this put the firm in a position to benefit from the new center.
Introgen’s founder, David Nance, is a close friend of Perry’s. He
contributed $100,000 to Perry over the decade, he had previously served
on the advisory committee of the tech fund awarding the $50 million, and
Perry’s son, Griffin, owned Introgen stock between 2001 and 2004.

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Introgen
had its main drug rejected by the FDA and declared bankruptcy shortly
before the $50 million award, but Nance continued to do well by the
state. In 2010, the tech fund awarded $4.5 million to his next venture,
Convergen, even after a review panel rejected the application. The fund
paid Nance’s daughter $70,000 for promotional work, and several fund
employees went to work with Nance. Perry also provided $1.9 million in
federal funds to a separate Nance venture, Innovate Texas, founded in
2008 as a sort of clearinghouse for Texas tech firms. The outfit paid
Nance a six-figure salary. It is now defunct.

Corruption as defined by Transparency International is abuse of entrusted power for private gain. Thus TI does not limit the term to cases involving politicians or government. But surely the indictment of Governor Perry raises multiple questions about political and government corruption by this definition, and this corruption involving health care. The definition used by TI is ethical, not legal, and it is impossible to predict whether Governor Perry will be convicted.

Still, while Texas Governor Rick Perry's indictment was big news, and fodder for a lot of discussion about politicization of the criminal justice system, the multiple issues the case raises about possible health care corruption have been ignored by most major news outlets, and no one so far has labeled the case as having anything to do with "health care corruption," or words to that effect.

Former Governor Robert F McDonnell (Republican - Virginia) on Trial for Bribery and Corruption

Meanwhile, the press has been fascinated with testimony in the bribery and corruption trial of former Virginia Governor Robert McDonnell. In 2013, the Washington Post published a long investigative report about how the Governor and his wife seemed to be promoting a dietary supplement called Anatabloc as an anti-inflammatory agent while accepting various favors from the CEO of the company that made it. The background on the company is

[Johnnie R] Williams’s company, Star Scientific, was introducing a dietary supplement called Anatabloc, whose key ingredient is found in tobacco and other plants.

Anatabloc was crucial to the future of the company, which has been
losing money for years. But the science behind the product — an
anti-inflammatory the company hopes might be helpful to people with such
ailments as Alzheimer’s and multiple sclerosis — was unproven.

The article described how Mr Williams paid $15,000 for the food at the Governor's daughter's wedding, and provided "rides on Williams' corporate jet, personal gifts for the first family...." In fact,

Over eight months during the 2009 gubernatorial election, Star
Scientific donated more than $28,500 worth of air travel to McDonnell’s
campaign. That commitment increased after McDonnell took office; Star
reported donating nearly $80,000 in flights to Opportunity Virginia, the
governor’s PAC.

Apparently in return,

Three days before her daughter’s June wedding, Maureen McDonnell flew
to Florida, where she spoke at a seminar for scientists and investors
interested in anatabine, the key chemical in Anatabloc, according to
people who attended the conference.

The governor’s wife told the
group that she supported the product and touted the pill, which is not
regulated by the Food and Drug Administration, as a way to lower
health-care costs in Virginia, the attendees said.

About three months after the wedding, the McDonnells and Star Scientific
were together again, this time at the governor’s mansion for the
official launch party for Anatabloc.

A prominent political donor purchased a Rolex watch for Virginia Gov.
Robert F. McDonnell, according to two people with knowledge of the
gift, and the governor did not disclose it in his annual financial
filings.

The $6,500 luxury watch was provided by wealthy
businessman Jonnie R. Williams Sr., the people said. He is the chief
executive of dietary supplement manufacturer Star Scientific

Also, now that the trial is ongoing, there was sworn testimony that Governor McDonnell seemed to be helping to market Anatabloc, as per Reuters,

Virginia Governor
Robert McDonnell gave a personal pitch to a state healthcare official
for the dietary supplement at the heart of the former governor’s trial
on corruption and bribery charges, the official testified on Monday.

Sara Wilson, director
of the Virginia Department of Human Resource Management, said McDonnell
pulled out a bottle of the product, Anatabloc, at a meeting she and her
boss had with him in March 2012 to discuss healthcare.
McDonnell,
a Republican, 'said how much it had helped him and his wife,' Wilson
said under prosecution questioning on the 11th day of the federal trial.

There was also testimony that Mrs McDonnell tried to market the supplement to 2012 Republican presidential candidate Mitt Romney, as stated in a Washington Post article,

After Virginia Gov. Robert F. McDonnell (R) endorsed Mitt Romney for president in 2012, McDonnell’s wife sought out the candidate
to promote the dietary supplement now at the heart of the former first
couple’s corruption trial, a onetime aide testified Monday.

Maureen
McDonnell and then-Star Scientific chief executive Jonnie R. Williams
Sr. showed up together at a news media session in South Carolina hoping
to pitch Anatabloc to the prominent Republican, said Phil Cox, Robert
McDonnell’s chief political adviser at the time.

Cox, also executive director of the Republican Governors Association,
said that he put a stop to that plan but that Maureen McDonnell went on
to talk up the supplement to Romney’s wife on a campaign bus. He said
she told Ann Romney that the anti-­inflammatory supplement, Anatabloc,
could 'potentially cure MS.'

Now this case is clearly all about allegations of health care corruption. The allegations are that the CEO of a health supplement company provided extensive favors to a politician and his wife, who then made several attempts to market one of his products as treating and possibly curing disease. Yet while these allegations are pretty clear, no one so far has called this a case of possible health care corruption.

By the way, in the last few weeks I also found relatively obscure mentions of two other cases involving allegations of health care corruption. One was a case in which an Ohio Indiana state representative took actions on behalf of a health care real estate investment trust that he, his family members own in part, and whose board includes one major political donor (see the AP story via the Providence Journal). The other was a case in which the West Virginia Attorney General had inherited a case from the former office holder involving a drug and medical supply company for which his wife is a lobbyist (see the Charleston Gazette story).

Summary

As we have said before, when health care corruption is actually discussed in polite circles,
including the scholarly literature about medicine and health care, the
discussion usually refers to corruption elsewhere. In particular, in
developed countries, discussion of health care corruption usually
focuses on less developed countries.

Now we see that when the issue clearly is the possibility of health care corruption, even the news media will avoid using such a term. Articles may describe what amount to health care corruption. They may refer to it as corruption. But they will not pair that term with health care (or medicine, or anything similar). The subject of health care corruption remains taboo. As long as we do not discuss it, some can preserve the illusion that it does not exist. Thus the anechoic effect continues.

So to repeat an ending to one of my previous posts on health care corruption.... if we really want to reform health care, in the little time we may have
before our health care bubble bursts, we will need to take strong action
against health care corruption. Such action will really disturb the
insiders within large health care organizations who have gotten rich
from their organizations' misbehavior, and thus taking such action will
require some courage.

ADDENDUM (24 August, 2014) - the state legislator referred to above in the story about the health care REIT was actually from Indiana, not Ohio. This was corrected above.

ADDENDUM (24 August, 2014) - this post was re-posted on the Naked Capitalism blog. Thanks to a comment on that to alert me to the error noted above.

2 comments:

Anonymous
said...

Another Texas issue is that of Xerox (formerly Dallas based ACS), who up until a few months ago was TMHP - the public private partnership that administered Medicaid in the state. Many political contributions to Perry may be part of the reason that the contract (1+ billion) was renewed several times, despite documented failures. TMHP paid out over 1 billion to Texas orthodontic (dental braces) providers between 2003-2011, a staggering amount compared to every other state. Texas is now suing Xerox and has fired them, but that is after multiple reports showed that things were out of control.

There is so much wrong with our medical industry, I don't know where anyone would start to clean up the mess! Apparently, those in power really don't care if the industry implodes as they have made their money. It seems more like organized crime than a profession which is supposed to help people...

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